Ex-Im approves $2B in financing for nuclear power plant in U.A.E.

September 7, 2012

Source: Export-Import Bank of the United States

Westinghouse employees pose at the company's facility in Cranberry Township, Pa. Ex-Im Bank financing will support the export of Westinghouse goods and services to the U.A.E. for the construction of the first nuclear power plant on the Arabian Peninsula. (Courtesy of Westinghouse)

In a decision that will support thousands of American jobs, the board of the
Export-Import Bank of the United States (Ex-Im Bank) has authorized a $2 billion direct loan to the Barakah One Company of the
United Arab Emirates (U.A.E.) to underwrite the export of American equipment and service-expertise for the construction of a
nuclear power plant in the Emirate of Abu Dhabi, U.A.E.

According to estimates derived from U.S. Census Bureau statistics, the line of credit will support approximately 5,000 American jobs across 17 states. [Native Advertisement]The transaction will finance the construction of the first nuclear power plant on the Arabian Peninsula, which upon completion will number among the the largest nuclear-generating facilities in the world. Additionally, the loan ranks as Ex-Im Bank's largest transaction in the U.A.E. to date and counts as Ex-Im Bank's first greenfield nuclear-plant financing since the late 1990s.

"The 5,000 American jobs figure speaks volumes about the importance of the transaction to the U.S. economy," said Ex-Im Bank Chairman and President Fred P. Hochberg. "But in addition to bolstering American jobs, Ex-Im Bank will make history by backing the construction of the first nuclear power plant on the Arabian Peninsula."

The National Security Council and the Departments of State and Energy all support the transaction. Moreover, the U.S. and U.A.E. co-signed "U.S. – U.A.E. 123 Agreement for Peaceful Civilian Nuclear Energy Cooperation" in 2009 and the "Arrangement Between the Nuclear Regulatory Commission of the U.S. and the Federal Authority for Nuclear Regulation of the United Arab Emirates For the Exchange of Technical Information and Cooperation in Nuclear Safety and Security Matters" in 2010.

Barakah One Company plans to erect four nuclear reactor power-generating units on a coastal strip along the Arabian Gulf approximately 220 kilometers from the city of Abu Dhabi, a site chosen in light of seismic, socio-economic, and environmental factors. The reactors, supplied by the Korea Electric Power Corporation (KEPCO) and based on the state-of-the-art APR 1400 design, will come online at one-year intervals effective 2017 and yield an aggregate capacity of 5,600 megawatts gross electricity.

Westinghouse Electric Company LLC, a Pittsburgh, Pa.-based group company of Toshiba Corporation, is the largest exporter involved in the transaction and will provide the reactor coolant pumps, reactor components, controls, engineering services, and training. Employing approximately 9,000 people in the United States, the company retails fuel, technology, plant design, and equipment to customers in the nuclear power industry. Westinghouse nuclear power plants are currently under construction in China and the United States, among others.

"Westinghouse is delighted that the financing for Emirates Nuclear Energy Corporation four-unit Barakah project has been approved by the Bank's Board of Directors, and we remain dedicated to ensuring an effective implementation of the project and related loan," said Ric Perez, the president and chief operating officer of Westinghouse Electric Company. "This work will create and sustain U.S. jobs in California, Connecticut, New Hampshire, Ohio, Pennsylvania, South Carolina, Texas and other states home to Westinghouse sub-suppliers. Within Westinghouse alone, the Barakah project will allow us to maintain about 600 U.S. jobs. In addition, the Bank's support will sustain hundreds of well-paying jobs at Westinghouse's U.S. sub-suppliers and indirect jobs in the service industry."

Ex-Im Bank, in conjunction with various U.S. and U.A.E. governmental agencies, has conducted a detailed and extensive risk assessment of the project. The U.A.E. invited the Integrated Regulatory Review Service of the International Atomic Energy Agency (IAEA) to examine the nation's nuclear regulatory framework. Likewise, the Federal Authority for Nuclear Regulation of the U.A.E. established an internal task force to address the safety implications and lessons-learned of the Fukushima accident and to establish a process of outreach to the IAEA and other nuclear regulatory bodies throughout the world.

Along the same lines, the U.A.E. has entered into a number of important treaties and conventions pertaining to the nuclear sector and has signed bilateral agreements on the same subject with the U.S., Korea, France, and Japan, among others.

As of the end of FY 2011, the U.A.E. accounted for approximately $3.7 billion of the Bank's worldwide credit exposure, and in the same year the Bank approved a total of $415 million in authorizations to support American exports bound for the country.